Market summary and Automakers’ trim in production | Calamatta Cuschieri

Maltese markets closed in the green on Friday with the MSE Equity Total Return Index climbing up 0.704% to close at 9,861.44. International Hotel Investments Plc’s 3.95% gain, saw it close at €0.79, while HSBC Bank Malta p.l.c. closed at €1.53 following a 2% gain. Meanwhile, Malita Investments p.l.c. fell by 1.18% coming to a close of €0.84.

Despite opening the week with a global selloff, on Friday, US markets closed with very little damage. The Dow Jones Industrial Average fell by 0.7%, or 197.57 points, to 26,287.44. The S&P 500 also faced a decline in points to 2918.65 by 0.5% together with the Nasdaq Composite falling with 0.6% to 7959.14.

European shares experienced a downfall on Friday with Italian stocks falling by 2.5% due to uncertainty in the political environment. The pan-European STOXX 600 closed 0.8% lower, consistent with a decline in world stocks. Fortunately, the London’s FTSE faced limited losses owing to a rally in healthcare stocks and a 7.2% increase in advertising company WPP.

General Motors’ drop in production

General Motors are set to reduce production of the Chevrolet Equinos SUV at two North American car plants, following cuts from Ford and Honda amongst other manufacturers. Automakers are thus encountering the second down market since the end of the Great Recession, and the decline in demand, this time depends on how President Trump approaches disputes with China and other trade partners.

Mary Barra, CEO of General Motors, stated that they have learned valuable lessons from the previous recession. As a result, GM will be employing a responsible, proactive strategy by adjusting production in line with market demand as to escape any unnecessary losses which may eventually lead to bankruptcy. General Motors’ most recent cutbacks have increased concerns that new increasing utility vehicles coming to market might form added difficulties for the automotive industry.

According to data extracted from Edmunds tracking service, automotive interest rates have increase to 6%. However, the future of automotive companies lies in the faith of the ongoing disputed going on in the US economy. Despite manufacturers are showing improved discipline, in order for inventories and incentives to remain in balance, temporary reductions are to remain expected.

This article was issued by Nadiia Grech, junior trader at Calamatta Cuschieri. For more information visit, https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

Calamatta Cuschieri is one of Malta’s largest financial services firms. The company offe...